This was inevitable. AdMob founder and CEO Omar Hamoui has responded to Apple blocking AdMob from the iOS ecosystem. Unsurprisingly, Hamoui isn't particularly amused, claiming that not only is it bad for competition, it will also hurt developers and users alike.

I don't get the deal.
Google isn't allowing alternative advertising agencies to handle ads on Google Search either. It's all Google's own ads.
Why would Google allow competing ad providers on their own websites? Why should Apple make an exception for Google's AdMob when Google makes none as well?

Because Google's website is Google's application.
And likewise if Google wrote an application for the iPhone Google should choose how to display ads in that specific iPhone app.

I can understand Apple recommending their own ads. I can even understand Apple adding features to make their ads more preferable (better integrated APIs etc) - though even that is straying dangerously towards MSs territory of old (ie how MS app's integrated with Windows better than 3rd party apps because of unpublished APIs)

What I can't agree with is Apple dictating how 3rd party developers build 3rd party applications. Particularly when Apple have "opened" up the device with the illusion that developers are "free" to make a living from it.